Pandora Sets 40 Hour Monthly Cap On Free Mobile Listening

Pandora announced in a blog post today that it is installing a 40 hour monthly limit on free listening to its Internet radio service over mobile devices.

The company said it decided to take the step in the face of rising per-play content costs. Those who top the 40 hour mark will have the choice of shifting to listening via a PC, pay 99 cents for the rest of the month, or sign up for the company's subscription service. Pandora says the move will affect less than 4% of active listeners.

Here's the text of the company's post:

February 27, 2013

A note to our listeners

This week we will begin communicating directly with a small number of our listeners as we introduce a 40-hour-per-month limit on free mobile listening.

Most of you reading this will never hit the limit. In fact, it will affect less than 4% of our total monthly active listeners. For perspective, the average listener spends approximately 20 hours listening to Pandora across all devices in any given month.

That said, limiting listening is a very unusual thing to do, and very contrary to our mission so we wanted to share a quick explanation. Pandora's per-track royalty rates have increased more than 25% over the last 3 years, including 9% in 2013 alone and are scheduled to increase an additional 16% over the next two years. After a close look at our overall listening, a 40-hour-per-month mobile listening limit allows us to manage these escalating costs with minimal listener disruption.

For listeners who do hit the limit, we have a variety of options available to keep the music you love flowing. Listen for free for as many hours as desired on desktop and laptop computers; pay $0.99 for unlimited listening for the remainder of that month, or subscribe to Pandora One for unlimited listening and no advertising.

In short, this is an effort to balance the reality of increasing royalty costs with our desire to maximize access to free listening on Pandora. We will be sure to alert any of our listeners that start getting close to the 40 hour limit. As always, your feedback is welcome.